Setting financial goals is just a fancy way of saying “Let’s daydream about what we would do if we had some money.”
It’s really important to cultivate good financial goals. Let’s talk about how to do that, and I’ve provided a free template to help you.
A long-term goal is something you want to achieve over the next few years. A short-term goal is something you want to achieve over the next few weeks or months.
So a long-term goal might be something like “I want to save for a downpayment on a home” or “I want to go on a month-long trip to Italy.”
A short-term goal may be something like “I want to save $1,000 this month” or “I need to save for a new set of tires.”
A goal that’s not written down and planned for is just a daydream. Write it on a piece of paper, or your bathroom mirror, or the notes app on your phone.
If you want to save $1,000 this month and you get paid weekly, you would make a plan to set aside $250 dollars from each paycheck. Basically, the formula is: The amount you need divided by the time frame.
For each goal pick 1-5 steps you need to take to achieve it.
Daily or weekly tending makes achieving those goals much easier.
I’ve found it easier to budget by paycheck or to budget weekly. Here is a video where I break that down.